What to Expect From the Cash for Appliance Program

After the perceived success of the Cash for Clunkers program this summer, the Department of Energy pledged that a similar $300 million rebate program would soon roll out for inefficient appliances. More than three months after that July 14 announcement, details still remain hazy. Here are three common questions about the new program.

Q: How is the Cash for Appliance program different from Cash for Clunkers?

A: Unlike the national Clunkers auto program, this rebate varies state by state. Expect the first announcements of the 56 states and territories' DOE-approved plans to roll out around Earth Day in April or around Presidents Day in Februrary, but no earlier than the beginning of December 2009. Regardless of the fine print, don't expect any "up to $4500" levels of generosity here. Homeowners should consider $100 per machine a windfall profit. But here's some added value--the recycling service typically picks up the old appliance for free, sparing you the considerable hassle of hauling the thing away. Add in all the energy saved long-term, and maybe you'll agree it's time for a brand spanking new dishwasher after all.

The DOE expects the program to encompass a broad group of machines. Likely candidates for rebates include: central air conditioners, heat pumps (air-source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers and refrigerators. Within this group, Sears home appliance senior vice president Doug Moore says, "Refrigerators offer the greatest potential for savings." Moore expects up-to-date rebate information on sears.com to "generate excitement" about the program through a "dynamic refreshing of data." Right.

At least 25 states already have rebate programs on the books, according to the Association of Home Appliance Manufacturers' Jill Notini. Notini says that extending the existing states' programs is "better than starting from zero" with a comprehensive national plan. Sears' Doug Moore adds that one benefit of this program will be to raise consumers' awareness about successful programs that are already locally available.

Q: Do I have to retire my old machine?

A: That's another difference from the auto program. There's no comprehensive requirement to take the inefficient machines off the road. John Farley, senior marketing manager for Bosch home appliances, says his state may require consumers to prove they recycled the old appliances to be eligible for rebates on new ones. That state--good guess--is California.

If you own a machine ready for retirement, don't wait for the program to kick in. The new deal will probably piggyback onto your existing local appliance recycling service. If you're in the western U.S., that service likely has some connection to JACO Environmental, a major refrigerator recycler. Michael Dunham of JACO says that the company focuses exclusively on fridges because "they're such environmental time bombs." His organization fillets the fridges, sorting out the copper and steel, separately disposing of refrigerants and then recycling the polyurethane insulation into tennis shoe soles. Dunham says he wishes the rebates would encourage recycling, even if they stop short of mandating responsible disposal. He's in the business, of course, but he raises a larger point: "If a person upgrades to a new fridge, then takes that old fridge and just puts it in the garage, then all they've done is add to the consumption."

Q: What new appliances will qualify for rebates?

A: The details within each state's plan remain to be seen, but it's safe to assume plenty of Energy Star appliances will make the cut. The majority of appliances qualify for Energy Star, and determining how to value rebates for particular machines within that broad group gets to the heart of the weaknesses in the Energy Star system. The DOE has plans to introduce an Energy Superstar rating to reward the top 5 percent of appliances. But until that goes into effect, the DOE has no established method to distinguish a barely-qualified machine from the most efficient appliance ever made. It's also unclear whether more generous rebates will convey the superstar product's superiority to consumers.

Still, Energy Star is shaking things up. This August, the group published a children's "Activity Book" that features Dr. Seuss's environmentally aware character the Lorax--he's the one that "speaks for the trees." He speaks for the earth in Energy Star's retelling, and implores children to "Join the EPA in spreading the word, then finally the voice of the earth will be heard." So as the rebates roll out, don't be surprised if you hear the voice of your 5-year-old piping up with an informed opinion about how to shop for the family's next fridge.